RI’s rubber output to decline

Rubber output in Indonesia, the world’s second largest producer after Thailand, is expected to decline slightly to about 3 million tons this year from 3.1 million tons last year, according to the Indonesian Rubber Producers Association (Gapkindo).

Gapkindo Chairman, Asril Sutan Amir was quoted by Kompas Monday as saying that the expected excessive rainfall this year would hamper rubber production. “The excessive rainfall will hamper rubber tapping,” he said.

The declining output will in turn affect the country’s rubber export. Gapkindo estimated that rubber export this year will decline by 150,000 tons to 2.45 million tons. The main export markets remains India and China, the world’s largest consumers.

However, despite the declining production, rubber price is expected to remain healthy this year at around US$3.7-4 per kg. He explained if the price of the commodity hovers at around $4 per kg, or about Rp 36,000 per kg, farmers will still enjoy good profit as the break event point is at around $3.5 per kg.

Last year, the highest price level of rubber was $5.8 per kg.

Elsewhere, Asril opposed a proposal by the Ministry of Industry to impose export tax on rubber, as the move would only create heavier burden for farmers. He pointed out that out of the country’s rubber acreage of 3.4 million ha, around 2.9 million ha are run by smallholder farmers.

Meanwhile, Director General of International Trade at the Ministry of Trade Deddy Saleh said that his office has yet to formally receive from the Ministry of Industry about the proposed export tax on rubber to push for the development of downstream rubber industry. “So it (the proposal) is still at the discourse stage. It has yet to become an official proposal.”

He added that it would be very difficult to push for the development of the downstream rubber industry in the country. (rei)